Well, this past year was quite the trial, and the new year is already off to a wild start. With all the volatility, uncertainty, and ambiguity in our complex world, it may seem absurd even to try to make 2021 our best year ever. One thing is certain though. We cannot sit on the sidelines waiting for things to get better. There is no magic pill or government intervention that will cure things. We don’t know when life will get back to “normal,” and there’s no guarantee what we thought was normal before will ever even return.
When the world around us changes at an ever-accelerating pace and it seems more and more obstacles are being thrown our way, we must determine how to manage effectively. We must make critical decisions in an environment where it is hard to predict what the future holds. We are continually challenged to make decisions that can have significant and long-term impact on our business, our employees, and our own careers and lives.
As leaders, our job is to forge ahead with plans and actions to drive business results. A key challenge of leading in this VUCA (Volatile, Uncertain, Complex, and Ambiguous) world is to integrate greater flexibility into our business. Long-term planning is still important as we need that guiding light, that true north, to help us focus on our intended destination. We need a healthy balance of near-term planning too to drive agility.
The future may be uncertain, but we must persevere. See below for five key strategies you can use right now to make 2021 your best year ever.
1- Determine your ideal future – Where do you want to be three, five, or ten years from now? Define what that ideal future state looks like for you and your organization. Then, develop a roadmap for how you will get there by defining various milestones of what you will accomplish to achieve your strategic objectives.Work backwards from your end goal to today.
What will you have accomplished three years out? Two years out? At the end of 2021? Remember to set specific and measurable goals across business functions and for each of your key leaders to help monitor your progress and inspire new actions along the way.
2- Implement a rolling 12-month budgeting process – The traditional annual budgeting process was first introduced in the 1950s, and it has not changed much since. It usually starts in the third or fourth quarter and continues through the end of the fiscal year, engaging multiple departments within the organization through multiple iterations of working budgets until the final version is approved. Once it is, the budget typically does not change for the remainder of the fiscal year.
Performance measured against this static budget can produce very misleading results, especially in a VUCA year like 2020 with a pre-pandemic budget in place. A more progressive approach, then, is to use a rolling 12-month budget. This ensures you always have a current budget available. In the event of a material change to your revenue, expenses, or broader market conditions, you can more easily and quickly adopt these changes with a rolling budget. Rolling budgets can be adjusted period to period giving you the ability to manage your business more strategically, especially in VUCA times.
3- Consider consumer trends on a rolling basis – Similar to this more progressive budgeting process, we need to consider the shifting needs of our customers on a rolling basis. Today’s COVID conditions have had a profound impact on consumer habits and customer demands, and that’s not likely to change for at least the first half of 2021. That means we will likely experience continued pressure on our day-to-day business, so we need to be more adaptive and respond quickly when our customers’ needs change.
If you are in the business of supplying food and household goods to grocery stores, for example, you could reasonably forecast the demand of how much your customers might need each of your products in most years. Who could have expected a run on toilet paper, though, last year? Assessing consumer trends on a rolling basis and maintaining more regular communication with our customers enables us to adjust our business as needed throughout the year.
4- Use 90-day Sprints to improve performance – Ninety-day Sprints are incredibly effective to keep us marching toward our long-term goals while also improving our day-to-day operations near-term. These Sprints are typically designed around strategic opportunities and the expected benefits for optimizing our business to deliver better value for our customers and greater return for our shareholders.
Depending on your specific circumstances, you might design a Sprint around implementing enhanced operating systems to drive better data analytics. Or maybe you want to streamline your customer engagement and go-to-market strategies. The key to successful Sprints is establishing 30-, 60-, and 90-day micro-goals. These micro-goals define shorter-term targets that keep our teams motivated and minimize distractions and long-term fatigue. In doing so, they enable us to celebrate our quick wins while also adjusting to changing market conditions.
5- Course correct as needed with Start-Stop-Continue assessments – As we consider our ideal future and implement these new strategies, we need to determine which of our current behaviors and actions will serve us well in the year ahead as well as what new behaviors or actions might be needed. Conducting Stop-Start-Continue assessments of what we may need to do differently as individual leaders and/or what our organization may collectively need to do differently in the year ahead is a powerful, non-threatening way to focus – and accelerate – our performance improvement efforts.
Ask yourself the following questions. Based on the positive results I am/we are already producing, what should I/we CONTINUE doing? With this strong foundation in place, what can I/we now START doing to produce even greater results? What should I/we immediately STOP doing because of the poor results I am/we are experiencing? Conduct these assessments at regular intervals, like every 90 days, to evaluate performance and adjust to any shifts in the market. It’s all about course correcting and setting new short-term tacks to reach your intended long-term destination.
Making 2021 our best year ever starts with rigorous planning and looking across our businesses to build greater flexibility into our routine practices. Look for shifts in the markets you operate, anticipate potential break points, and then stay ahead of those problems to create a resilient and sustainable operation. We need to control the controllable wherever possible with clear goals and defined measures for success. We also need to learn from our ongoing experiences though to overcome any obstacles we might encounter and drive performance improvement to deliver better results. With an eye towards our long-term goals, we can more effectively manage our near-term actions even in this VUCA world!
So, what are your strategic intentions for 2021? Are you ready to achieve your best year ever? Give me a call at 310.589.4600 or email me directly for some additional thoughts on how best to set your breakthrough goals and objectives for the year ahead. Or visit the Innovation Workshops page of our website for more on how we regularly enable business leaders like you to address their greatest leadership and organizational challenges. You might also want to watch the highlights of a recent webcast entitled “Resilient Leadership in the Face of Setbacks & Uncertainty” if you’re struggling to stay focused right now.